Principles of Macroeconomics (11th Edition)
11th Edition
ISBN: 9780133023671
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Question
Chapter 4, Problem 3P
To determine
To illustrate whether profit opportunities exist for scalpers when there is excess demand using supply and demand curves.
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When excess demand exists for tickets to a major sporting event or a concert, profit opportunities exist for scalp-ers. Explain briefly using supply and demand curves to illustrate. Some argue that scalpers work to the advantage of everyone and are “efficient.” Do you agree or disagree? Explain briefly
When excess demand exists for tickets to a major sporting event or a concert, profit opportunities exist for scalpers. The table below indicates the quantities demanded at various prices, fill in the values for the supply curve for tickets to a sold-out venue that holds
20,000 people
Price per
Ticket
Quantity of Tickets
Demanded
Quantity of Tickets
Supplied
350
45,000
20000
100
40,000
20000
150
35,000
20000
200
30,000
20000
250
25,000
20000
300
20,000
20000
350
15, D00
20000
The fact that there is a face-value price of $50 per ticket could be illustrated on a graph as a horizontal line at $50
The equilibrium price that will prevail in the market if scalpers are allowed to operate in the black market would be 5 300 per ticket.
The quantity of tickets demanded at the face-value price is 45,000 tickets.
For this example, a shortage of tickets exists at the face-value price.
The demand and supply curves for beach volleyballs are given by:
D = 80-4P
S = -2+2P
The current price is 19. How much is the excess supply or demand? Write a positive number
if you find an excess supply, and write a negative number if you find an excess demand.
(round your answer to one decimal place)
Chapter 4 Solutions
Principles of Macroeconomics (11th Edition)
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